Let me clarify then because there's two things I'm talking about.
1) A script that represents a living breathing world, so whilst NPCs aren't seen all the time, it's obviously a well traversed area in a bustling city. You get kicked out if you're recognised by NPCs and the script is representing this. You may also be kicked out of key city areas, so for example Guldorand is a very large area that also includes all that space outside the gates because it's the same map.
2) You might get recognised (disguise broken or poorly disguised) by a PC who then alerts the NPC guards or whatever. If you're super lucky and a DM is online + interested in going along with the story, then maybe an NPC helps out. Maybe they believe the PC, maybe they don't believe the PC. Maybe bribes are involved, maybe the PC is a nobody so the NPC is like "Who are you why do I care what you have to say this could be anyone" or maybe they're the settlement leader where the NPC is more likely to just do what they say even if they're having a mistaken identity moment.
1 is the way things are to represent DMs and PCs not always being around to interact with the exiled people who are breaking the city laws and trying to sneak in, whilst 2 is more about roleplaying interaction.